Eric Crawford | Offshore dream not for tax haven
The Jamaica International Financial Services Authority (JIFSA) writes in response to a Gleaner editorial published on May 6, 2016, with the headline 'Whither Jamaica's plan for offshore services?'
In the context of the Panama Papers expose' and their implications, you queried the timeliness of Jamaica's plans to establish "offshore financial services business", sought insight into the "Government's thinking" on how Jamaica will proceed, and questioned whether it still sees this industry "as a feasible option". You asserted that if the "rules are changed" (presumably as a consequence of the Panama Papers), the legislative framework may require rethinking and a redefinition of our strategy.
How will Jamaica proceed?
The Government has indicated its commitment to pursuing this initiative and has mandated the JIFSA to do so expeditiously. This commitment is reflected in the fact that JIFSA's legislative programme has already been adopted by the new Legislation Committee of Cabinet.
We appreciate your concern as to the appropriateness of Jamaica's strategy and our "place in the sun" should the rules change (as a result of the Panama Papers) and welcome the opportunity to address the understandable concerns.
However, the 'rules' have been evolving for some time. Consequently, Jamaica's efforts at establishing a centre of excellence for international financial and business services are premised on respect for, and compliance with, the international rules. For example, Jamaica has taken steps to outlaw the use of bearer shares, one of the most abhorred instruments used to facilitate opaqueness.
In 2010, Jamaica joined the Global Forum a 134-member agency of the Organisation for Economic Cooperation and Development (OECD) charged with crafting and monitoring standards for the promotion of tax transparency and received a largely compliant rating in 2013 under its Phase 2 review and is now known for its commitment to transparency with a well-developed system of accessing information and its proficiency in exchanging information. This rating has placed Jamaica on par with Singapore, the United States and the United Kingdom, and as high as any other jurisdiction in the region.
The opportunity exists perhaps now more than ever before for Jamaica to compete in this market, by providing value-added services at competitive rates, rather than on the basis of secrecy or tax evasion. Our value proposition is to leverage Jamaica's cost competitiveness, offer a moderate tax regime and a robust, transparent and sophisticated regulatory regime. This will distinguish us from loosely regulated jurisdictions, which find it difficult to operate in a sound and highly regulated environment.
Furthermore, Jamaica is untarnished by recent blacklisting and labelling of certain jurisdictions as tax havens, which is a major reason our entry into this industry is most timely. It is not late as some critics have asserted a sentiment with which you appeared to have agreed by your reference to "an open, well-lit field" We have a strong domestic financial regulatory system, as well a large cadre of highly skilled English-speaking professionals in the region, proximity to the largest market in this hemisphere, and an outstanding Internet and telecommunications infrastructure.
We remain focused on our current strategy to develop Jamaica into a well-established, strongly regulated and transparent jurisdiction that will not depend on a no-tax or nominal-tax environment for its viability. We are not seeking to create "filing-cabinet residence for foreign firms" or a '"registry for offshore companies" (despite your reference to the numbers that I quoted, which were alluding to the potential based on the experience of a neighbouring jurisdiction).
We will not be creating a tax haven. Our objective is to attract investors to take advantage of Jamaica's many advantages, its people, time zone and cost competitiveness.
Thank you for the opportunity to elaborate on our mission through the pertinent and timely questions that you have raised.
• Eric A. Crawford is chairman of the Jamaica International Financial Services Authority. Email feedback to email@example.com.